Colo. Approves Higher Education Vouchers

Colorado legislators have approved a first-in-the-nation program
that will give high school graduates vouchers to pay for college
tuition and make sweeping changes in how the state finances higher
education.

The plan won legislative approval last week and now awaits the
signature of Gov. Bill Owens, a Republican and a supporter of the
measure.

Known as the College Opportunity Fund Act, the initiative redirects
how universities receive millions of dollars in state aid. Currently,
the bulk of the funding for higher education is appropriated by the
legislature to Colorado’s 13 state college and university
systems.

Under the new plan, a big chunk of that money will go directly to
undergraduate students in the form of $2,400 yearly vouchers that each
student could redeem at a public college or university.

Some observers see Colorado’s plan as a more market-driven
approach, in which institutions will depend more on attracting students
to generate revenue. Supporters say the model will ultimately increase
universities’ funding stability and encourage more in-state
students to attend college.

The plan appears to differ from many state financial-aid programs in
that it offers a stipend to all in-state students, rather than making
awards based on household need or academic merit, said Patrick M.
Callan, the president of the National Center for Public Policy and
Higher Education. Georgia’s popular HOPE Scholarship, for
instance, rewards students with strong academic credentials with free
tuition at any in-state public institution.

But Mr. Callan questioned how strong an incentive Colorado officials
would have to hold down tuition, knowing that students were each
guaranteed a $2,400 yearly voucher.

"It’s an interesting approach, but I’m not sure the same
short-term benefits will be there for students as there are for
universities," said Mr. Callan, whose research center is based in San
Jose, Calif.

In- State Tuition

A bill creating the plan passed the Colorado House by a 40-23 vote
on April 27 and the Senate by a 22-13 majority the same day. The
measure will not require a new spending allocation.

All Colorado high school graduates accepted to one of the
state’s 28 public community colleges and four- year institutions
will be eligible for the vouchers, beginning in the 2005-06 academic
year.

As in many states, the Colorado legislature now distributes money to
university systems after reviewing yearly budget requests. The
state’s fiscal 2004 higher education budget is $592 million, a 23
percent decrease since 2002, according to the Colorado Commission on
Higher Education.

Colorado universities’ funding requests have been limited by a
constitutional stipulation known as the Taxpayer’s Bill of
Rights, which restricts the rate at which state agencies can grow, and
by Amendment 23, which directs specified amounts of state funding to
K-12 schools. The college voucher plan allows state institutions to be
reclassified as exempt from the constitutional caps, under state
law.

Undergraduates will be required to apply for the vouchers each year.
Their aid will be overseen by the Colorado Student Loan Program, which
will allow institutions to draw from student accounts to help cover the
students’ tuition costs.

Supporters predict the voucher plan will help correct what they see
as a long-standing problem: Too few Colorado high school graduates are
going to college, compared with many other states, they say.

The voucher plan "will make the idea of going to college more
tangible for them," said Dan Hopkins, a spokesman for Gov. Owens.

The vouchers would cover just over half of the $4,022 in-state
tuition at a four-year school like the University of Colorado at
Boulder, where the university estimates that total costs for this
academic year, including on-campus room and board, are
$15,179.

A Few Private Colleges

When the measure takes effect, undergraduates now enrolled in public
institutions will also be eligible for the stipends, said Jennifer
Nettersheim, the spokeswoman for the Colorado Commission on Higher
Education, which supports the plan. Each year, Colorado legislators
will have the power to adjust the $2,400 amount.

Students’ eligibility for other state and federal college aid
will be unaffected by their receipt of the vouchers, Ms. Nettersheim
said; nor is funding for existing state aid programs altered by the
plan. Students will be eligible for vouchers until they have completed
140 credit hours—roughly five years of study, Ms. Nettersheim
said.

Students attending three private postsecondary schools in the
state—Colorado College in Colorado Springs, Denver University,
and Regis University, in Denver—will be eligible to receive
$1,200 yearly stipends. Those undergraduates will have to be eligible
for the federal Pell Grants program, however, to qualify.

Some critics question the constitutionality of devoting voucher
money to private schools. But Ms. Nettersheim is confident the plan
would stand up to legal scrutiny. Last year, Colorado lawmakers enacted
a K-12 voucher plan, which is on hold because of a legal challenge.
("Colo. Judge Puts State's
Vouchers on Hold," Dec. 10, 2003.)

Colorado’s plan is the first in the nation to take state
appropriations from universities and redirect them to individual
students, according to Christine Walton, an education policy associate
with the Denver- based National Conference of State Legislatures.

Colorado’s planned program will be closely watched by other
states, said Kenneth E. Redd, the director of research and policy
analysis for the National Association of Student Financial Aid
Administrators, in Washington.

He wonders, though, whether the voucher program will really fulfill
the state’s goal of encouraging more students to think about
college. "If anything, students will get the vouchers and say,
‘Why’s [the $2,400 amount] so small?’" Mr. Redd
said.

But Ms. Nettesheim said the plan will give lawmakers an incentive to
provide Colorado’s universities with necessary funding, which
will ultimately help students.

"We’re hoping that with this approach, the legislature will
look at state funding and see [the needs of] a student, not an
institution," she said.

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